A Conversation with Prudential

Through the TED Conversations platform, Prudential is partnering with TED to engage the community on the challenge of longevity and retirement security.

Christine Marcks

President,Prudential Retirement

This conversation is closed.

A conversation with Prudential: As people are living longer, how can we plan for a retirement that could last up to 30 years or more?

The Baby Boomers will be the biggest generation to retire so far in America. 10,000 people are now retiring every day. On average, they will face longer retirements lasting 20 to 30 years or more.

For a couple age 65, there is a 50 percent chance that at least one of them will live to age 90. But, according to the Center for Retirement Research at Boston College, 51 percent of households are at risk of not having enough to maintain their standard of living in retirement.

We live in uncertain economic times, with health care costs rising and guaranteed pension benefits in decline. How do we make sure we don’t outlive our savings?

Prudential believes these new challenges demand new solutions to achieve better lives in retirement. So tell us: what do you want to do in your extended retired years? And, how should you plan for that?

Closing Statement from Christine C. Marcks, Prudential Retirement

Thank you all for a dynamic conversation over the past three weeks around how we -- as individuals, as financial services providers and as a society -- can help address the challenge of retirement as people live longer. TED Conversations is a new forum for us, and we found your comments and this experience very insightful.

I believe there are concrete steps people can take to better prepare for their retirement. For starters, workers can improve their savings and investing behavior. Secondly, participants in workplace plans such as 401(k)'s should try to include some sort of guaranteed income component in their retirement planning.

We will also continue this conversation in other forums, and will add to the national debate through white papers on our company's Research & Perspectives site, http://research.prudential.com/view/page/rp .

Apr 10 2012:
Wow, I am somewhat surprised about the hostile tone people are taking towards the concept of retirement! Somewhat surprised, but not completely.

The whole concept of 'not working' for 30+ years is heresy in many cultures - especially American culture where people are told that they should work and contribute unless for some reason they can't (such as disability or very advanced age - and then there are people who argue that the disabled and old should work too).

The fact is that retirement made sense when people did physically demanding labor and their bodies shut down at 65. You can only dig ditches for so long before your knees, shoulder, etc gave out. In today's environment where many people ride a desk for 8 hours a day, retirement simply makes less sense.

I am for giving a lower retirement age for people who work 10+ years in physically demanding jobs (construction, etc) or who have severe health issues and making the retirement age 62 and raising the age for people who do not engage in physically demanding work. If you are sitting at a desk and have good health, realistically, you can work until 70 and beyond.

The real wrinkle in all of this is the obesity/health care epidemic. We are going to see people - a lot younger than retirement age - in their 50's who are incapacitated due to lifestyle choices such as poor diet, lack of exercise or smoking.

Personally, the only people who I know who look forward to retirement are people who hate their jobs and see retirement as a ticket out. They want to leave the workforce, but have no idea what they'll do with their lives once they retire. Part of the solution is finding work that is fulfilling and that you love while you are in the work force. Then you'll never want to retire.

Apr 16 2012:
Well said.
It is amazing how immature many can be on these matters, not sure I exactly agree with your perspective, nor need of I to,, nor you for me too, however, personal responsibility and maturity in these matters is paramount. We are leaving Baby Boomers, and the Me generation in the dustbins of their own delusions.

Apr 18 2012:
As someone who sat at a desk and also maintained a healthy level of exercise throughout my "main career", I can tell you that desk jobs are not easy on the body. I do not believe we were designed to sit and work for long stretches of time. I am the ripe age of 61, nominally retired. That means I left my killer desk job for a life of my own design.

When we were still in grade school, we were being told automation would replace most jobs and we should prepare ourselves for a life of leisure. The 40 hour work week would go out the window. Instead, the reality was the 60 hour work week, for the professional.

I seriously doubt this will translate to the longevity projected for this generation. It is more likely the idea that over half of us will live to be 90 is the same sort of fable as the automation taking over work of people. Beyond that, the diseases of these times are increasingly autoimmune disorders that are episodic and debilitating. The source of which are for another discussion.

Apr 19 2012:
I'm retired, but.... I feel secure mostly because I'm a backpacker and in good health. Also because I've lived in poor countries and have seen on how little millions of people survive. Backpacking involves carrying your home (tent), bed (sleeping bag/pad), kitchen (alcohol stove), food supply, and 'emergency kits' (medicine, sewing supplies, glue, batteries, first aid items, etc) on one's back. Except for periodic resupplies of food and water, one just keeps walking. The 'ringer' is what happens in case of illness or accident. The answer's pretty simple (and look to the developing world here): you find care or you sicken and die. I think the real challenge of aging is not 'having enough to live on' but rather a more critical need: health insurance (or enough money to obtain treatment). I know and have known folks who are still working into their 80s, who have started successful businesses in their 70s, have hiked thousands of miles in their 60s, and so on. Retirement is simply a vacation. One can start it; one can 'retire from retirement'. And in the developing world, folks don't send out resumes or try to get hired. They just start making things or providing things that other people will buy! If they don't (and if family members won't take them in) they die. We all die. They just die younger. And so with folks in our 'developed world'. The biggest difference is that in OUR world we have expectations that are very high, whereas in most poor nations (and among their peoples) they don't expect as much as we do. The match their dreams to the possible. We might do the same.... That's an individual call, not a collective one. Relying on insurance companies, 401Ks, company 'plans', and even 'savings' are great ideas -- but humans should always have backup plans. I'm reminded of Russian 'retirees' selling junk on the sidewalks in the mid-90s. They did what they had to do....

Apr 18 2012:
I am not expecting to retire, ever. I don't believe pensions will still be available in 21 years, when it would be time for me to receive one. And even if they are, mine will be too small to be useful.

Instead, I am taking my leisure time as I go along, by working part-time. I have only worked two-and-a-half years full-time in a working life of around thirty years. Currently, I work 2.5 days per week, and enjoy more time with my friends and family, doing many of the things that other people wait until they're 65 to do. Of course my children and I have to live modestly to be able to afford this part-time working pattern, but we do fine: I have bought my little house outright, I run a car, we have holidays, and we have everything we need - and more.

Retirement is such a precarious notion. I know people who stay in jobs they hate, dreaming about a happy future while they live in a miserable present. I know some who waited 30 years to 'live their dream' and found themselves too ill to enjoy it, or too tired, or (to put it bluntly) too dead. How much better to begin your retirement when you're still young enough to enjoy it!

Apr 25 2012:
I am of a generation that just heard that my retirement age has been extended to 67. I have no doubt as the deadline looms that it will creep ever forward.

I like your thought that the concept of work - then retirement - has to undergo a fundamental shift in perception. I also plan on staying active as long as my health allows. I fill my days with volunteer activities and hobbies that I am passionate about. I enjoy all my days including the salaried ones. I suspect I will carry this same vitality and optimism through my sixties.

The concept that one is to work for others for a peculiar and particular life-sentence, deferring living for oneself afterwards has got to go. I suspect if I do officially retire, I will carry on hobbies and interests that may not provide a STEADY income but will fill my days.

To answer prudential, I think it is unfair to suggest that the vital young invest ever more for an extended
retirement".

Apr 9 2012:
The concept of "retirement" only came into existence in the 1880's in Germany and the life expectancy was 45. And I suspect when introduced the assumption was there wouldn't be too many takers. My guess is that in the developed world no one could have predicted the situation of life expectancy we face now.
What we need is a cultural shift in terms of how we deal with longevity, this involves educating the present twenties to the idea that they will face long lives. So that there is a need not just for financial planning but also health planning for the future. With rising health care costs personal healthcare budgets have already been mooted and I suspect life enhancing procedures will diminish as life saving ones increase to meet crisis points of care.

For myself the years may by extended , to describe them as retirement I don't think so. Revising my school maths is called for and balancing income and expenditure more crucial than before.
Somewhat to Jane Fonda 's use of the phrase "third act" I think in terms of life's phase 3 where it is possible to revise what is important at this point and work towards it. Reduced income maybe, reduced activity no. One thing to consider is that with the baby boomers, is that never in human history has there been such a bugle of wealth and experience been present. So the call is not just to become gray nomads but to aim to replicate this bugle of wisdom and experience into the future.

Apr 10 2012:
I disagree. Most organizations have a set retirement age of around 60-65 yrs. You cannot be a part of the organization after that. And chances that you'll get yourself a job at 65 are very slim.

Apr 16 2012:
Part of the question is, what could the pension funds do to provide a better product?

If there are experts in the field of long term investment, a very high proportion should be employed by the pension funds, and they should be considering a number of factors, such as:

- pensions are long term products with a lifespan that can easily reach 80 years
- the more money taken out of funds to finance overheads and salaries and bonuses, the less there is to pay pensions
- there are year cohorts where life expectancy peaks but it then drops off
- investment markets are volatile
- economic cycles are volatile

None of these facts should surprise anyone, less so an organisation with access to actuarial skills. So ahve pension providers been attracting people to their products by making promises which they were unlikely to keep? Or perhaps the pension product is no longer a good way for a person to invest for their retirement.

Apr 16 2012:
Anne, you are correct in saying that defined benefit plans – or pension plans – have been a great way for workers to save for their retirement. But in America, they are steadily being replaced by defined contribution plans, specifically 401(k) plans in the private sector.

That being said, in Europe and to some extent in the US, pension fund managers are looking at new solutions to transfer risks such as market volatility, longer lifespans and delayed retirement to insurers such as Prudential, so that companies can keep the pension promises they've made to their workers.

These pension risk transfer solutions are important innovations for the retirement industry, for employers, and for workers alike.

Apr 9 2012:
Stop worrying about your retirement -- it may never happen! Only SOME people will live longer!

Most of us will exit to the happy hunting ground younger than our grandparents generation. Insurance companies are projecting forward using the longer lives of the generations born in the 1920's, 1930's and 1940's. These people grew up eating real food - in moderation, doing regular exercise since cars were not so prevalent, and they also benefited greatly from advances in basic health care, especially due to antibiotics and improvements in maternity care. So, it only seems that more people are living longer while these pesky pre WW2ers are kicking around - looking all fit and sprightly into their 80’s and 90’s…

As the couch potatoes, obese, chain smoking, drunk, drug taking (pick your poison) post WW2 generations get older, many more lives will be cut short via cancer, liver disease, heart disease, diabetes, stroke, over dose - not to mention drug resistant bacteria such as MRSA and drug resistant diseases such as TB.

The raising of the retirement age will only result in more people dying at work.

Only bother taking out an enhanced retirement policy if you’ve lived as the Amish do - otherwise…continue as you are and quit worrying - it's bad for your health.

Apr 10 2012:
It would be interesting to see what the WHO have done on forecasting trends in life expectancy due to all the modern excesses of the developed world. Glad you made this point - its part of the wider picture which hasn't been fully explored.

Apr 29 2012:
I think we should focus less on the traditional concept of retirement, as a time when someone does not earn any money. More and more people will need to earn money into their 70's, and the real question for me is: what jobs will be available for those past 70, which still earn a reasonable wage? Most over 70 won't be able or willing to travel, work 40+ hours or have the strenghth or health to do what they were able to earlier in their careers. I see it as a duty of governments and big companies to design jobs targetted at the older employee, enabling them to work for as long as they want (within reason). I assume technology will bring a lot more flexibility than we have today. I think we are at the beginning of a change in jobs design in organisations and everyone's view of retirement.

Apr 28 2012:
Continued investments...
Worried about healthcare? Leave mainland US and invest yourself in a better society where people have realised that healthcare should be free to all.
Worried about fuel costs? Buy your own renewable electric generation and adapt.
Worried about fundamental problems in society? Get involved in a personal way - make a difference.
Worried about cash flow? Learn from transititon towns about how some money systems are surplus to requirement.

Whatever a money-seeking capitalist wants to worry about will be much greater than any one else, that's the problem with focussing on an abstract solution for concrete problems. (especially if the focus is purely abstract)

Apr 29 2012:
i don't get why do you recommend different solutions for different products? for healthcare, you recommend state granted mandatory insurance, for fuel, you recommend self service. why don't you want state provided free energy too?

Apr 28 2012:
Planning for retirement, in my opinion is a waste of time. Why, because all it takes is 2 or 3 visits to the emergency room and health care costs can eat away your savings within a few years. In the end most of us who are not filthy rich will lose most of our savings and assets to health care related services. Research the issue.

Apr 27 2012:
I have to agree with Jose, but I would like to propose what I would see as the best solution. It's not real to try to find a way to increase the retirement pension to be able to last 30 years. That's not the idea of a retirement pension. The idea of it, is to have something to live of when you reach a point when you can't work anymore. My grandfather worked after the retirement till he was 76. He did it because it was good for him not for the money.

Considering these two ideas, I think the best solution is to raise the retirement age unless there is a health condition that unable the person to continue working and offer a retirement pension that works progressively. A plan where after a certain age the person starts working less hours or he retires from his job and the company that provides the retirement plan offers him a job that is designed for this plan, like a freelance work of their specialty. That would allow them to stay active, to continue contributing to society and earn money.

Apr 26 2012:
Looking inside lifespan increases we see that mental and physical healthy years increase too. So I think people should find ways to extend his working years while decreasing the hour per week ratio. That approach is a progressive social change. This change in the society seems more sustainable and gratifying than trying to live the last 30+ years from rents of investments.

(I'm talking from Europe where people work 40h/week till 63 or 65 years old)

Apr 28 2012:
i couldn't agree with you any more. i'd like to say that this idea could not only help resolve the physical problem,liking short of money,but also enrich the elder everyday life, it is like a double-return solution.

Apr 26 2012:
The most important factor is communication, and all forms of media can be used to educate. We need more objective information. Unfortunately, our government is the largest impediment. The Federal Reserve's policy of artificially repressing long-term interest rates to boost short-term economic results in an election year, and to encourage more home purchases, is disastrous for savers and for pension plans. In past economic recoveries, long-term interest rates were about 5% higher than they are now. That equates to $20,000 in additional income each year for someone with a $400,000 retirement nest egg. Pension plans are facing enormous shortfalls in funding as a result of these lower rates also, impacting government and private sector plans which need to now require higher contributions and reduce benefits. This is not being effectively communicated. The good news is that it will not last forever, long-term rates should start to rise in the next couple of years. How do we convince our government to be more honest about the downside to its policies?

Apr 26 2012:
suppose the interest rate goes up. how will the US government renew the maturing t bills/notes/bonds? not even massive cuts, which are unprecedented, could help fast enough. what can prevent a default?

and here we are, on topic. in your retirement plan, how much t-stuff you have? in case of default, how much you lose?

Apr 27 2012:
That is a separate, but valid, issue. It will be tricky to unwind all that low interest rate debt, and the fed's balance sheet. I hold no treasuries, they are one of the worst investments one could make at this time, in my opinion.

Apr 25 2012:
As we draw this conversation to a close, I'd like to hear your ideas - how can we leverage the power of digital tools and social media to make more people aware of and actively engaged in securing their own future? What emerging technologies could help people become more aware of the need to plan for a retirement that could last decades?

Apr 21 2012:
As someone who has practised as a financial adviser in the UK since 1986 it's clear that the path most people are on with regard to planning for retirement is wholly inadequate. In the UK the average pension fund for a retiree in the private sector is less than £30,000! We have been seduced by those that went before that retirement at 60 or before is a realistic option. Unfortunately the war generation like my own mum have had such a good time in terms of healthcare, pension and state assistance that younger people believe they too can have this. They can't and they won't. Retirement will be an experience for those in their 70's at the earliest. Governments needs to create 'sinking' funds for future retirees and investments need to be made for retirement from birth! Those investment need to be locked up until age 65. Access is not an option and compounding can then really work it's magic!

Apr 21 2012:
Education is primarily important. People should try to learn the basics of financial management so that others wont be able to dominate their thought process while selecting an investment plan.

Keep a certain portion of your money invested in government securities that will ensure that it does not bite the dust (even in times of recession.)

Cut out on the unnecessary expenses (it varies from person to person) and invest those savings wisely.

Try to go for multiple sources of income by utilising your free time in developing your creative instincts and being updated with the developments in the economy. This is will yield results in the long run

Invest in the stock market in long term securities. They are generally low priced in the beginning. Go for short term stocks as well but make sure you quit after a desirable return on investment. With proper planning your investment will definitely multiple in the long run.

Apr 28 2012:
Exactly, it seems like you got a pretty good ideas for the current dilemmia, but you know, "easy said than done", a smarter investor would definitely have a reasonable investment portfolio, there are several problems here, first you need a big fortune which is the basis before you do a package inves,right? and you know stock market is always a competitive environment involving all kinds of people ,of course, has winners and losers ,it could not make sense everyone wins all the time, or the whole economy would blow up .

Apr 20 2012:
The secret of surviving in hostile environments is not primarily about planning. (There's a famous quote, paraphrased from Helmuth von Moltke's "On Stategy": "No battle plan ever survives contact with the enemy!"). Surviving is much more in line with Charles Darwin's statement that "“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” The toolkit is one's mind! Imagination, flexibility, self-discipline, keeping one's head when others panic, and so on.... A successful retirement (as any other project) has little to do with what one HAS, and is all about what one IS.

Apr 20 2012:
It has been very interesting to see how this conversation has progressed over the last 10 days. Your perspectives on lifestyle in retirement, or for that matter, lifestyle decisions made in the present that will affect one's retirement have been great for me to hear. But, I wonder, when is the last time we assessed if we are on the right track towards having "enough" (which I realize is very subjective) to afford the retirement we envision? Who are we asking for help or having discussions with about this topic?

Planning for the retirement demands that we not wait until that day is imminent. More than ever before, as Kevin Goodwin notes, individuals will have to own the creation of their retirement security, with advice, guidance and solutions from their financial advisors and financial services providers.

Apr 20 2012:
In an increasingly unstable (Western) world, it is increasingly difficult to see and plan beyond the next year never mind for some time in the future that maybe a never, never land. Can you tell me what percentage of people actually plan for these years?

I suspect in the developing countries planning for retirement is a luxury of thinking that few engage in. For some planning for old age is limited to having enough children so that one of them will survive and look after me when the time comes.

Apr 20 2012:
I'd go a bit further, given the fact of increasing instability of the world. I wonder if we aren't living in something like the years of the Weimar Republic. What German in 1928 would have predicted the partition of Germany, the capital (Berlin) in ruins, armies from Russia, France, Britain and the U.S.. occupying the (partitioned) nation, millions dead (counting both troops and civilians). For reasons unknown, humans tend to project the recent past and the present into the future. Incredible! And now we have nuclear proliferation and biological and chemical agents unknown in 1939-1945.... Still, folks try to 'plan for the future' as if it weren't a mostly futile project. I heartily recommend to all Nassim Taleb's work, "The Black Swan", if only for his depiction of starting his life in a peaceful and prosperous Beirut -- and the fantasies the adults surrounding his life entertained about the nation of Lebanon "returning to normal" (as if there were a 'normal'). Great book. L

Apr 20 2012:
I think by raising products/services their prices, to save the extra corporate fiancial income to save money via the governement for employees and independents their retirement.

But something else I think of now is to buy a house, pay it back to the bank, to sell it at a certain stage of retirement and to go and rent an appartment.

And last but not least I now think of living healthy, as healthy and preventing as possible. To practice health tips and local product stores and services(like swimming and mental excercise clubs) as well as possible.

Apr 28 2012:
cool ideas, i have to say you got a pretty stimulating answer for the problem,and in some extent it does make sense, the rate of rising housing price can not be beat in the society,so investing the real state is definitely a good idea for keeping your money updated. but only a problem here now real state market has alreadly been full of speculating things ,and if these people join them and do some so-called suppport there ,i wonder the world economy could survive or not under such environment .

Apr 20 2012:
Having thought this over a bit now, my main thoughts are that retirement plans address an uncertain future, and the exigencies of the present tend to trump those in a tight pinch. The beauty of the Social Security system is the money is saved untouchable.

If a person has both the discipline and the means to set aside money on a regular basis and simply leave it alone in a safe interest bearing account, that is a good retirement plan, in addition to whatever they may have through an employer. I personally nicked into every retirement plan I had, as life presented both opportunities and emergencies. So I was able to buy a condo after a divorce, buy a house when the condo lost its value in an earthquake and we needed to move, save the life of my daughter when medical insurance was not enough.

Those on this board who are 20 something and outraged or older and blessed with personal wealth may not realize that voluntary savings plans work out great when there is excess, but when you need more, you do tap the savings, and pay the penalties. You are grateful you can do it. And you do not think of it as robbing your future self. All the plans you make never can take into account what you cannot guess at that lies around the corners of time.

Apr 20 2012:
As a family physician I have learned that few of my patients other than government workers with pensions expect to retire. Most of my patients believe that they will work until they are sick, confused, or 80 (whichever comes first).
They expect that they will need those years to compensate from lost income from DIVORCES first, and poor investments
second. Government workers expect to retire after 30 years of work. If they are lucky enough to start work at age 22
they expect to collect 30 or 40 years of pensions.
With the poor investment options available (see the Economist cover article..."No where to hide")...most people can no longer count on investments to permit retirement. So the solution to the Social Security question "how can we afford this"...well...people will not retire until they are very old...or very frail.

Apr 20 2012:
i would point out that government workers are having false hopes. government promised them money, but where will they get it? what if the government finds out that these promises can not be kept. what if they cut it heavily? either through direct cut, or lying and deceiving (like inflation). because promising is easy. i can promise myself.

Apr 20 2012:
One type of barrier to effective retirement planning is psychological -- we humans procrastinate, undervalue the importance of events happening in the future, and cling to familiar habits. Our Center has an interactive tool -- "Curious Behaviors that Can Run Your Retirement" -- designed to educate people about these behavioral barriers. It's available at: http://fsp.bc.edu/curious-behaviors-that-can-ruin-your-retirement/

Good point about saving. It needs to be instilled in people at a young age and conducted as a routine activity that everyone naturally engages in. And saving has two key advantages -- the familiar one of helping you accrue assets to tap later and the less familiar one of reducing your consumption today so that your expectations for how much you need to consume are kept in check.

Apr 22 2012:
that observation about keeping consumption in check is spot on. savings can serve as a shock-absorber in the unlucky case of a sudden downturn. it can even out a smaller bump. and it can give time to adopt to a greater change.

Apr 19 2012:
Krisztian...you hit on the key point. Ultimately we need to be responsible for our own financial well-being. Using the services and investment vehicles of a company like Prudential are great, but they can not and should not be our only method of managing our finances. Any investment can go belly up. Any service can fail. We must manage our finances and make adjustments where and when necessary. As you said, it is not enough to give our money to someone else to take care of it.

Apr 19 2012:
Christine, I can appreciate the benefits of variable annuities and continued "guaranteed" income. The key question is whether that income meets or exceeds the rising cost of life in retirement. It may keep pace with status quo retirement life but all it takes is one event (medical emergency, new medical condition, car accident, home repairs) to push one's expenses beyond what a fixed income annuity can provide. I don't de-value annuities. They are smart investment vehicles for the cost-conscious. That being said, other vehicles of income are still needed. Unless a person has amassed so much wealth that they can live on the interest and use the principal in case of emergency (most people will not reach that level), continued income (at or near the level of their working income) is really the only "safe retirement".

Apr 19 2012:
there is a much deeper problem with it, and you very well put the word guaranteed in quotation marks. who guarantees it? how it is calculated? in dollars? in gold? indexed by CPI? what if the company can not deliver? what if they go bankrupt? what if the state goes bankrupt? what if serious budget cuts are needed, and part of it is reducing government guarantee? what if the state goes bankrupt, and all bonds become worthless? what if housing prices fall to oblivion?

we need to hear about these. it is not enough to give our money to someone else to take care of it. we need some convincing arguments why they can succeed? what do they know that we don't? why give them our money and not someone else? or why not just buy gold or stocks on our own?

Apr 19 2012:
You can adjust the values you enter to see how investment amounts and ... Invest and grow your retirement savings to make your money work for you. ... People are living for longer than ever, this means you need to plan for a longer retirement. ... in order to draw an income that will last you 30 years of living without working as web application developer.

Regarding your question, I'm originally from Palestine / west bank, and due to the difficult situation there on ground, my retirement plan is safe money now, to buy my own small house, and to buy my own clinic (as I'm a dentist) and to start working in that clinic, till the last day in my life. And if i were lucky and managed to save more money i may start a small project to support me more in the future.

Apr 19 2012:
Scaling at community level, there are sadder realities (or just unconscious of side-effects), when looking into the multi-dimensional practices people deploy, mostly based into a culture of slided or transferred meaning:
- using retirement to design towards a guaranteed income
- thinking that if they use retirement and mean about them (retire from something), might be absolved of guilt (did not McLeod" or take anyone else out). Issue is what are people around them thinking, community impact of terms, etc.

Re-engaging seniors into the workforce (subsidiaries, internships, think-tanks) would:
-help as a counter-strategy for generational conflict
-synchronize, overlap multi-generational knowledge, speed all kinds of learning
-provide enough care, rejuvenation, ergonomics, rehabilitation etc projects for the health-care to slow resources into disease-creation and secure their survival from serving human life quality
-isn't it about time for some all-generational success stories to kick-ass of the top 40 under 40 charts, that define success under 'boom or bust' life pressure?
-Would rebuild some lost trust into the system, as people might in time be more willing to 'let go' for a while.

That's just one strategy of many. Location specifics may matter as well. Looking at the world historical changes, and recent US turmoils, looking at their current political 4 years cycles and their mormonic roots, that would link into another conversation.

Apr 19 2012:
I can envision wonderful possibilities, yet cautionary at the same time with the retirement situation.

At macro-economic and social level, my positive mind would link it with re-engagement, re-juvenation and life optimization projects. Simply looking at the numbers presented, 10,000 retirees per day=300.000 per month ~= 3,600,000 per year. Cross-referenced with USA total population of about 308,000 (x1000) from Wikipedia, it ironically represents about 1% of total US population. Some may see retirement from retirement is a gloomy way, I, as a witness of senior 're-sparkling alive', would advocate for re-engaging willing seniors back into work-force. (California pioneering senior re-engagement programs come to mind). Enthusiasm towards long-living is most likely to ripple effects into enthusiasm for living, planning life wisely even into younger generations. A design-backfiring caution would be of what people thought when they retired in the first place (if they thought a young on e got a job because they retired, can they be brought back into action while maintaining existent workforce?) An even crueler question, is it worth it, when there are still young ones, capable of work, unemployed?

Still at larger spectrum level, from the Asian retirement dilemma presented in the "Elephant & Dragon" book, with longer-living asian families of 1:2:4 (one child - 2 parents - 4 grandparents) ratio, makes me realize that individual goal-setting for retirement needs to be at an incredibly higher level to be able to provide for 4 long-living parents (in the ideal conditions of having all siblings or children self-supportive). This may change the individual-planning mentality.

Scaling at community level, there are sadder realities (or just unconscious of side-effects), when looking into the multi-dimensional practices people deploy, mostly based into a culture of slided or transferred meaning:
- using retirement to design towards a guaranteed income
thinking that if they use

Apr 18 2012:
As an engineer, this talk about the lack of financial stability, and the risk with investment portfolios is somewhat unreal to me.

We are in dire need of real investment into real infrastructure projects that are larger and take longer than ever before. Just have a glance at Exxon's investment plan for the next 5 years, which tops $100 billion, and includes many single facility construction projects that run >$5 billion. For energy in particular, we need major investment into new technologies at scale as well replacement of our existing infrastructure reaching the end of its life. Many of these projects have very good prospects of return, and taken as a whole, will certainly produce a good revenue stream. But as an individual we don't have access to these. Buying the Exxon stock is to pay far more for this capital than what it actually cost to build. At the same time, projects like new nuclear plants that we desperately need and produce one of the most stably priced commodities out there (electricity) can't get funded.

Do we really live in uncertain times? If we do, we have ourselves to blame for it. It is actually very baffling to me that we have not managed to solve the problem of reliably saving for retirement. If you think about it, since capital is needed to produce so much of our consumption, one would think that the physical means to produce everything we need for retirement years could by and large be produced in our working years. It's such a simple concept, it seems baffling that we talk about it as if it's so hard.

Apr 18 2012:
as a fellow engineer, i understand your shock regarding the mess in the financial and investment sector. but believe or not, this shock is quite capable to get much much bigger if you actually learn what governments tried to do all around the globe to fix the problems. it boggles the mind how did they hope it would work on any level.

i was in your shoes in 2009. i was eager to understand the meltdown. but i wanted to understand it as we, engineers mean understand, and not like economists. so i wanted clear terms, clear statements, backed up claims, and such. i was unable to find for a long time. then i came across a 100 years old theory of economics that actually can explain what's going on in the world, why investments failing on large scale these days, why investors afraid to invest, why we built thousands of houses that are empty, why we don't save, how the efforts to "tune" the economy actually destroyed it, why we have inflation and so on.

for an engineer, understanding is always good. but that understanding certainly does not relieve the shock. it deepens it.

Apr 18 2012:
Being a financial educator and regularly sitting with middle income families, a common monthly retirement figure which 9 out of 10 couples usually say they will be happy to live with, is £1,000 per month (UK). They are many ways in which this amount or more can be achieved and as a no brainer, the earlier one starts, the easier it is to build something which creates this amount, whether it be a pension, equity funds, property income, residual income etc
The state provides a measly £30 a week or so. We need to learn to be more responsible for our financial future and this really needs to begin at school/college level. Most of it is common sense but is not often common knowledge nor common practice.

Apr 19 2012:
Jon, I definitely agree that there is more room for financial education about retirement. That said, part of the challenge is that a lot of information is already available to people, but either they're not using it, or it's not impacting their financial behavior. May be information overload. We are trying to figure out a way to either encourage more people to draw upon the available information or come up with simpler solutions to impact retirement savings behavior. Sometimes, giving people a chance to interact with a game or tool helps. For example, we have a retirement income calculator, which translates current or future savings into retirement income that has had a significant impact on the amount people contribute to their retirement plans.

Apr 18 2012:
Ok, so with all the gloom and doom, you might ask what I recommend? I recommend getting into some form of business that you can readily manage in your retirement (investment real estate, ATMs, or storage facilities, come to mind) where you continue to have income through a low-involvement business. I would also recommend having ALL debts paid off well before you retire. That means mortgage, car, college loans, personal loans, everything. You can't win if you have debts that grow faster than your income. Lastly, get into the habit of eating healthy, exercising regularly, and sleeping more. These three things will do much for maintaining your health and, in turn, your wealth.

Apr 18 2012:
Maintaining "their standard of life" in retirement. Let's just look at that statement. Maintenance often means that something is being done. If someone is truly retired and not-working, then some other form of income must come in it's stead. Otherwise, there is no maintenance, even if all things are equal. If there was perfect Social Security, not in danger of bankruptcy in the near future, that standard still couldn't be "maintained" because the cost of living (inflation) rises faster than interest rates.

Without having a steady and unyielding form of income (like a job or a passive income business), no method of maintenance can hope to keep up with the cost of living. Next, add on the added medical expenses that accompany a person's senior years. The reality is that it medically costs more to be a senior and lack of mental and physical exercise (like one typically gets when working or managing an active household), causes ones capacities to dwindle faster. So cost of living is going up, expenses are going up and health is going down (though at a much slower rate than in generations past).

Many investment vehicles have sprung up to "guarantee" growth for seniors on fixed savings, fixed income. Sadly, there is no such thing as a guaranteed growth investment vehicle...even mutual funds and bonds can lose money (by not keeping up with the cost of living increases). Many investments are far more volatile and risky.

Our government systems can't predict how long we'll live, so the financial models they come up with to help us retire are poor at best. For more on this, see here...http://carpebootium.wordpress.com/2012/04/18/living-on-borrowed-time-part-1/

Apr 19 2012:
Kevin, you make good points about rising costs and inflation impacting retirement savings. The closest thing to the type of "guaranteed growth investment vehicle" you describe are today's variable annuities, in which performance guarantees are combined with the guarantee of not outliving your income. Some workplace retirement plans now also include products that offer guaranteed performance and lifetime income. In both cases, there is always a trade-off of increased fees and some loss of control over investment choices. We have found that these types of guarantees are increasingly being sought out by people planning for retirement, as a result of the setbacks many experienced during the recent financial crisis.

Apr 18 2012:
Why not imagine a new retirement system combining savings over a long period of time (>40 years) with solidarity within a class of age. The saved money being used over the years to finance loans for houses, entrepreneurs (lower risk investments but positive for the daily economy).

Example : You start working at 23, born in 1990, and with people of the same age (or class of age - 20 to 25 yrs old), you place 5% of your earnings in a national insurance collecting money from people of similar age.
Year after year, the fund develops (by savings and interests from investments) until you get the age for retirement. If you do not get there, the money you have saved is redistributed to lower income people of similar age (solidarity procedure against job failure, life accidents, deseases...).
When retired, you get monthly money with amount dependent of overall population in that class of age and of what you have saved during your work life).
Statistics of death allows optimisation of the amount of money to be redistributed during retirement to allow the olders still get money from the fund until the persons of that class of age are all dead.

Each class of age has a different fund and is independant of the others. There is no direct financing of the retired persons by the working, younger people.

Such a system can be started at any time with the younger workers.
Interests of interests is very valuable above 30 years of savings.
Good for the economy, good for good level pensions when retired + Solidarity between people of same generation.

Apr 20 2012:
Guillaume, what you are describing sounds a lot like a modification of the U.S. Social Security system. Interesting premise. Thanks for offering your ideas. Exploring new solutions to place more individuals on a secure path to retirement is the main reason I decided to participate in this discussion.

Apr 21 2012:
Chrisitine,...
Not only the U.S Social Security system... The problem is common in most countries in the world.
Even here in France, which is known for its highly protective security system, classical solutions fail today and are really too expensive.
We have a system where working people pay for retired people but with 2 working persons for 1 retired one, it gets impossible to maintain good living standards for retired people having no other income.
The best solution will always be to save money during life and make it work on a global stage...
Hope this idea will spread around...

Apr 21 2012:
the problem is even deeper than that. it is visible that there is not enough money for the retired, and the working is already taxed too heavily. what is not visible is the amount of wealth and development it already destroyed in the lack of progress and lack of capital accumulation. in fact, i firmly believe that europe actually consumes capital. i can't prove that, but that's my guess. we pay for social "security" with stalled progress, crippled, depressed lives, lack of vision and future. the mindset slowly turns from production to predation. if this trend continues, that will end the european culture as we know it.

Apr 17 2012:
I didn't actually mention defined benefit plans - in the UK a range of other products are also classified as pensions, and defined contribution plans are much more common here than defined benefit ones. Given the economic history of the past few decades, defined contribution plans don't look like a particularly good way of retirement planning.

I would be very interested to hear proposals from the insurance industry about what alternatives they would be prepared to offer, and, most importantly, how they would be able to deliver to their customer a degree of confidence in having a predictable retirement income in real terms.

The second part of that question is the most important - I don't want to be sold to, I want to see some hard commitment to delivery. It's the absence of that which makes me question whether pension plans are a sensible basis for retirement planning.

Apr 16 2012:
I have to suggest, that your entire question reflects how disturbing and nearly unsolvable our crisis is... 10,000 people are now retiring every day... So what are we going to do to plan for when they retire? What, this quarter? Weren't you supposed to be working on this with them for the last 40 years? I didn't realize that planning for a 30 year retirement in your 50's and 60's (baby boomers), was... mathematically acceptable.

Off the top of my head... I'd suggest an advertising campaign based around the baby boomers tragic tale "I didn't save any money... I didn't fight for workers rights... I didn't fight for wage raises comparable to inflation... I spent more than I saved... Now I'm broke, and I have to constantly beg my children, and the government for money..."

Apr 16 2012:
I agree, David, there are unprecedented retirement challenges facing not only this generation but the ones to follow. Prudential recently launched a campaign titled DAY ONE - www.dayonestories.com to shed light on the importance of retirement planning featuring authentic storytellers - the retirees themselves. Take a look and let me know what you think. Even though the reality may be challenging, looking forward to Day One and beyond of retirement with a positive and actionable approach is exactly what we are hoping to communicate.

Apr 16 2012:
i still don't see what *solution* do you offer. discussing the problem won't help one bit. the problem of retirement is how much savings people need, and where to put those savings. the first is easy. the second is hard. that is where your company could come into the picture. you can handle savings in a way they maintain their value over 10-20-30 years period.

do you have anything to say about that? what kind of investments survive 20 years? what is your idea, how to conserve value in today's environment? did the housing bust catch you? what is your current investment policy? how do you see the future of the stock market, the housing market, the bond market, the commodities, foreign stocks, foreign currencies, the dollar, and so on. what makes your company a reliable partner in handling money?

Apr 18 2012:
Christine - I've visited the dayonestories.com site and saw the Prudential ads that ran during the NCAA men's basketball tournament. Very well done! We are launching an initiative in Cincinnati that is a replication of the national Coming of Age program specifically directed to work with the 50+ generation. It's a program of Civic Engagement and self-discovery for the baby boomers and a way for nonprofits to tap the skills and expertise of people 50+. I'd really like to talk with someone at Prudential about helping us spread the message. Prudential programs help people realize their dreams and Coming of Age programs help people discover their dreams.
Our web site is www.comingofage.org, and you can reach me at mdutle@catholiccharitiesswo.org

Apr 20 2012:
As much as I was being a bit dark and sinister... I suggest you probably didn't think about the idea as a legitimate campaign, and you might want to. What do we need to do? We need to get 25-35 year olds thinking about retirement, instead of the elderly. Every generation has this problem to a greater or lesser extent, young people think they're going to live forever, then they hit midlife, and wonder why they have not retirement benefit saved yet... Children will be children.

If you want to maintain a place in this market as it evolves, you're going to have to reach the youth, they're not coming to you. As off putting as it sounds, I think a cynical, mildly depressing ad about an 85 year old person who will never reach day one, speaks to people my age a bit better than success stories. Especially if you can make it a bit funny, like that "bad idea" commercial. "No, No... Lift with your back, not with your legs"... "You know where surgery is dirt cheap"...

A commercial about an 85 year old man or woman, getting up and dressing in a uniform that for legal reasons, is not a Wal Mart uniform... Talking about how, "Every day I get up and work for a living, and I don't see why I ever wouldn't. I'm going to be useful and productive till the day I die. It's better to burn out than to fade away. People who plan to retire are just lazy anyway... I don't want to get old and just sit around doing nothing.

Maybe you start with a young kids voice, all you see is the uniform at first... then pan back and it's a baby boomer... Sounds like a winner to me. As for actual solutions... Make sure you're paying your CSR's enough to retire eventually, lead by example. Get involved in programs to increase the wages of laborers, and bring joe jobs back to the country, so that people have money to invest. Invest in solar concentration, and desallinization. Buy solar panels for retirees, and sell them energy, or encourage loans against retirement for sustainable energy...

I would be very interested to find out your personal opinion on how recent legislation changes have affected Prudential's approach? For example have the 'Solvency' regulations in Europe massively changed your long term strategies for making sure you can provide for people's retirements?

I personally feel that one of the key ways for mitigating against some sort of financial apocolypse where retirees don't have the funds to support themselves, would be to put a greater focus on providing education around financial planning topics to children at a younger age. I am currently enrolled in business school and I am only now learning the nuances of finance. Where was this when I was in school? It strikes me that it would be prudent of world governments to make this compulsory to stop or perhaps lesson the impact of what you are suggesting. Perhaps a scheme whereby the youth of today are encouraged to start their own retirement funds through a one off tax rebate?

Apr 17 2012:
Matthew, you brought up an important issue about the urgent need to provide financial education and training to individuals, even children, at a much younger age. Non-profit organizations in the US, like Junior Achievement, offer financial coaching programs and financial literacy initiatives and we are glad to be a supporter. I think the retirement industry will have a key role to play in this area.

In the spirit of your last paragraph 'that new challenges demand new solutions' here is the alternative economic viewpoint.

My retirement plan is based around the fact that I DONT have a retirement plan, not as such. I intend to keep on 'working' until the day I die, as someone who reached their 40th year just recently I must say that I dont see any benefit in economic based pensions plans and planning for retirement. My retirement plan is based around the fact that after a certain age society says I will no longer be subject to economic sanction if I choose not to work in traditional society and didn't invest in a retirement plan. That will allow me to spend more time tending an allotment, growing my own food, helping out in community projects, foraging sustainably for my own food and keeping mentally and physically fit in such ways.

So if Prudential corporation are really commited want to help people plan for old age then you should help them plan for increasing self sufficency in old age rather than investing in the traditional free market fueled investment/saving/dividend economy. You should help older people plan for a society in which they will be leaders and active participants in society where an old persons economic potential is limited.

I realise that this might be a challenging viewpoint to a retirement industry which is currently based around savings, investment and stock market viewpoints, but in uncertain economic times a more radical view may help you to become market leaders in this field. Just saying guys...

Apr 16 2012:
Terry, I appreciate your perspective and applaud your goal of self-sufficiency. Generations before us serve as an example of this philosophy but they probably didn't have to sustain themselves for as long as some of us may have to. You also bring up another good point - the types of retirement people want to have are as diverse as the people who will retire. Some may choose to grow their own food and others to eat out every day in restaurants.

What is important is planning for the type of retirement we want as well as for unforeseen events that may impact retirement such as medical needs. Savings and the income needed in retirement needs to be based on these individual needs. Regardless of what one's vision for retirement is, planning - financial or otherwise - for a successful outcome is key.

A simple change of mindset - thinking about the "income" one needs in retirement, based on desired lifestyle and needs, as opposed to building towards a fixed number may act as a catalyst.

Apr 12 2012:
Several of you have raised the point about having to retire later in life than planned. In January this year, Prudential conducted research which revealed that three out of five retirement plan participants felt they were either behind schedule in meeting their retirement goals or simply didn't know where they stood.

One way that has been shared to overcome this gap is simply to work longer to make up for the shortfall in retirement savings. While this may not sound terribly appealing to some, it can have benefits. Obviously, a few more years of contributing to your savings equates to fewer years that you will be receiving distributions -- not to mention the Social Security benefits that were pointed out by Andrew Eschtruth.

Working longer may be part of the solution, but it may not be an option for many. I'm interested in your thoughts. Are there retirement saving and investing behaviors that need to change? How can we make people more aware and then, take action?

Apr 12 2012:
Regarding guaranteed income in retirement, I agree that this issue is increasingly important. Today's retirees, who rely more on 401(k)s than traditional pensions, face a significant challenge in drawing down their assets in retirement. Securing a regular stream of income to add to Social Security can really help.

Apr 12 2012:
Since this country has gone through the greatest economic crisis since the depression hitting all facet of the economy, how has your investment strategy change regarding what you are not investing in as to what you are investing is. Along that line regarding the economic crisis do you feel this country should have a 5 year budget instead of a yearly budgets?

Apr 12 2012:
In my opinion, as a result of the crisis, there is a stronger individual and institutional focus on risk management. Since you ask, Prudential's long-term investment strategies built on risk management as a core discipline helped us weather the financial storm well.

You bring up an interesting question on investing behavior and investment strategy, one that has been top of my mind as well, since the crisis. Through the financial crisis, many people saw their savings decline by 40% or more. Understandably, this experience has changed perspective on investing for retirement in uncertain markets. Since 2008, a number of studies have shown significant shifts in what people are looking for. Many people approaching retirement age are seeking out investment options with guarantees, reflecting a greater awareness of the impact of market downturns on retirement savings. However, and this is an encouraging insight, people who were already invested in guaranteed products prior to the crisis tended to "stay the course" as the financial markets rebounded. Many of those who pulled out of the markets in 2008 and remained on the sidelines over the last few years are in a tough position today.

To have 5 year budgets or not is outside my area of expertise, but it could be an interesting topic for a TED conversation.

Apr 11 2012:
Our work at the Center for Retirement Research indicates that working a few years longer -- not forever -- makes a major difference. Many people today still retire around 62-64. Moving those averages up to the mid-late 60s significantly raises monthly Social Security benefits and gives one's savings more chance to grow. As most of us can expect to live longer than our parents, working a bit longer will still leave time to enjoy retirement.

Apr 10 2012:
it is interesting that you represent a firm that offers financial services, yet you ask us how to prepare for retirement. isn't it your expertise?

for start, you could tell us what was your investment portfolio in 2006. more specifically, how much money you kept in mortgage based securities. you can also tell us how much you keep in treasury bonds now.

retirement is not that difficult. if you want to work 30 years, and live another 30, you need to produce twice as much as you consume. considered also the childhood and early years, probably you need to save 2 times as much as you consume. if you plan to work longer, and have a shorter expected lifespan, the ratio can be lower.

this is if you consider all the channels of money. a government granted, tax based retirement plan (what we have in many countries in europe for example) is a form of savings (although rather convoluted).

and of course it is on average. some people might get lucky, and hit the jackpot with an exceptionally good investment. or one can lose a lot of savings investing it in bad ideas. but on average, and as a minimum, you need to save almost as much as you consume in order to have lazy days at the end. it is basic math.

what can corporations, like prudential help? they have to come up with investment schemes that preserve value. they have to understand how the economy works, and what are the fundamentals. for example any such company paying any attention to credit-rating agencies is a joker. they have to have their own resources and brains to navigate the financial ocean, so to speak. and if i find no investment policy and past success record on their website's front page, it is a big big problem.

Apr 11 2012:
Thanks for taking the time to share your thoughts about how individuals can plan for retirement. We believe that creative ideas on this subject can come from both our internal expertise and external perspectives and thinking. That's why we are hosting conversations and exchanges like this one.

Today, fewer and fewer people have access to the guaranteed income of a traditional pension plan and find themselves staying in the workforce for more years than they originally desired or not being able to retire securely and live the way that they had hoped.

We are working to help individuals through their employer-sponsored plans to achieve their retirement objectives and improve their retirement security by showing them the impact of what they will have to live on in retirement and by providing flexible, guaranteed income products and solutions.

Your point about financial strength is an important one. We believe that clients, brokers and companies need to understand who they are doing business with and should pay close attention to their business partners financial situation, capital strength and ratings. You can find ours in the Investor Relations section on our website.

Apr 10 2012:
You are, indeed unlikely to be able to get or keep the same job you've been in, if you've decided
to devote your life to one of the faceless giant corporation that substitute policy for judgment.
So you'll either have to migrate toward a more sensible employer, be your own boss, or take a lower
paying job somewhere. Or be valuable enough to your boss that he gets an exemption for you.

This is Prudential's undisguised ad, right? Does Prudential have a mandatory retirement age?
If so, why?

Apr 11 2012:
Goedjin, we appreciate you taking the time to weigh in on this important discussion with us about living longer and planning for retirement.

Prudential does not establish a mandatory retirement age for its employees.

Our decision to discuss the issue of retirement with the TED Community is in step with our mission to do our part to place more individuals on a more secure path to and through retirement. We believe that the economic challenges facing retirees demand new solutions to achieve better outcomes.

We know that we don't have all the answers. By reaching out to the TED community we hope to generate a conversation that leads to new ideas to help us better address retirement challenges.

Apr 10 2012:
Retirement idea comes from the people who work for a company. If the people can find the things to engage after that, you do not think about the retirement. For the younger generations, such as 30's and 40's, they can start their own business which can be sustained for the remaining life. For the people in 50's and 60's, they have lots of chance to contribute to the local communiity as they have experience and knowledge. After the disaster last year, people recognizes stronger ties within the local community helps to come over the disastrous situations. I think senior people are in the position to lead the community and back-up the younger people.

Apr 10 2012:
Men die at 76 on average in Spain and they now have to work till 67. After working for 45 years, paying social security contributions, someone steps forward with a statistic saying that some people are living longer than we want them to...what can we do to stop this terrible situation? Well, what I have to say to you cannot be reasonably printed in a public forum.

Apr 9 2012:
Balance between consumption and Saving
New Asset Classes (local community, leveraged, PPP, BOP, infrastructural bonds)
Greater Resiliency in our ability to take care of ourselves(Resilient Communities)
Working Longer, or Volunteering, Activity, Inter-generational Activities, lends to longer and higher qualities of life
New Career, Neuro-Plasticity (longer, higher quality of life, why retire, rather re-new)
Vocation(s) rather than Employment, Wealth Sharing Networks, rather than simply consumption or savings
Entrepreneurship, why retire if you can meaningfully,and in an enjoyable fashion continue to economic development
Micro-Manufacturing, Customization, should rise in importance
Services, Education, Life Long Learning
Not How long will I be retired, but how long can I positively contribute to a maintenance of a high quality of life, what new things will I be able to learn, in what ways can I grow things around me (self, others, opportunities)

People will need higher quality living, opportunities to continue to grow, participate in the development of others, and to re-deploy their wealth in ways that give back to the foundation that helped thme to create wealth for future generations.

This will have material, psychological, spiritual and quality of life implications, including enabling people to enjoy their lives while aging.

Hmmmm.....asset classes as stated, conservative, yet within the realm of exponentiation.
First thing, stop watching the financial channels, pick up the prospectus of your investment providers, and analyze the assumptions behind their investment philosophies to see if it gels with your beliefs and values, whatever they might be.

Apr 9 2012:
Social security used to cover retirement quite well, so well in fact that politicians had begun to dip in this money to sponser other programs. Fast forward 50 years later, and politicians still do it because it's the only cookie jar that they can't get caught sticking their hands into.

I think life expectancy is not as crucial as proper planning. If we prioritize spending, retirement will not be an issue, though the question really then becomes, "how do you keep politicians from thinking it is okay to remove retirement from future generations?"

Apr 9 2012:
What distinguishes the boomers from previous birth cohorts is not so much the length of retirement, but the fact that they are the first cohort that is being asked to accept responsibility for planning their retirement. In contrast to previous birth cohorts, who were covered by defined benefit retirement plans with fixed benefit formulas and fixed retirement ages, the boomers are free to choose, health and employment opportunities permitting, when to retire, and how much to save for retirement.

The evidence suggests that many of them are not making a good job of it. The world of the 1950s is not going to return, and the challenge is to understand why they are making mis-steps, and to help them to do better.

Economists attribute poor savings and retirement decisions to impatience, and time inconsistent preferences. Just as with dieting, people want to be good, but always find excuses for procrastination. But I sometimes wonder whether the problem is that we have difficulty in imagining our future selves. If we do not know our future selves, why should we care about their well-being. In this regard, I found the following TED presentation quite insightful: